[Federal Register Volume 65, Number 199 (Friday, October 13, 2000)]
[Notices]
[Pages 60932-60937]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-26331]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Boulder Canyon Project--Rate Order No. WAPA-94

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of rate order.

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SUMMARY: This action is to approve the existing Boulder Canyon Project 
(BCP) electric service ratesetting formula, Rate Order No. WAPA-70, 
through September 30, 2005, and to approve the Fiscal Year (FY) 2001 
Base Charge and Rates. The existing electric service ratesetting 
formula and base charge and rates will expire September 30, 2000. This 
notice for approval of the ratesetting formula and the FY 2001 Base 
Charge and Rates are issued under 10 CFR part 903.

FOR FURTHER INFORMATION CONTACT: Mr. Maher Nasir, Rates Team Lead, 
Desert Southwest Customer Service Region, Western Area Power 
Administration, P.O. Box 6457, Phoenix, AZ 85005-6457, (602) 352-2768, 
or by e-mail: [email protected].

SUPPLEMENTARY INFORMATION: By Amendment No. 3 to Delegation Order No. 
0204-108, published November 10, 1993 (58 FR 59716), the Secretary of 
Energy delegated: (1) The authority to develop long-term power and 
transmission rates on a nonexclusive basis to the Administrator of the 
Western Area Power Administration (Western); and (2) the authority to 
confirm, approve, and place into effect on a final basis, to remand, or 
to disapprove such rates to the Federal Energy Regulatory Commission 
(FERC). In Delegation Order No. 0204-172, effective November 24, 1999, 
the Secretary delegated the authority to the confirm, approve, and 
place such rates into effect on an interim basis to the Deputy 
Secretary. Existing Department of Energy (DOE) procedures for public 
participation in electric service rate adjustments are located at 10 
CFR part 903, effective September 18, 1985 (50 FR 37835). DOE 
procedures have been followed by Western in developing this provisional 
electric service ratesetting formula.
    The project began with 1928 legislation approving construction of 
the BCP. The 1928 legislation provided for a dam to be built in the 
Black Canyon located on the Colorado River adjacent to the Arizona/
Nevada border. Commercial power generation began in 1936 with yearly 
average generation of 4.5 billion kilowatthours (kWh). Its installed 
capacity is 2,074 megawatts (MW).
    BCP power is marketed in three states; Arizona, California, and 
Nevada under the Hoover Power Plant Act of 1984 and following the 
marketing plan approved and published in the Federal Register on 
December 28, 1984. The power is marketed as long-term contingent 
capacity and firm energy. This capacity and firm energy are available 
as long as sufficient water in the reservoir allows Western to meet its 
delivery obligations. If sufficient water to support Contractors' 
capacity entitlements is not available, each Contractor's capacity 
entitlement is temporarily reduced. Contractors are entitled to receive 
4.5 billion kWh of firm energy each year. If generation at Hoover 
Powerplant is less than that, Western can purchase energy to make up 
the shortfall at the request of individual Contractors on a pass-
through cost basis.
    The Boulder Canyon Project Implementation Agreement Contract No. 
95-PAO-10616 requires Western, prior to October 1 of each Rate Year, to 
determine the next FY annual base

[[Page 60933]]

charge and rates. The Base Charge and Rates for the first rate year and 
each fifth FY thereafter, shall become effective provisionally upon 
approval by the Deputy Secretary of Energy subject to final approval by 
the FERC. For all other FYs, the rate shall become effective upon 
approval by the Deputy Secretary of Energy.
    Western will continue to provide the Contractors an annual base 
charge and rates by October 1 of each year using the same ratesetting 
formula. The base charge and rates are reviewed annually and adjusted 
upward or downward to assure sufficient revenues to achieve payment of 
all costs and financial obligations associated with the project. Each 
FY, Western prepares a power repayment study that includes estimates of 
annual revenues and expenses for the BCP including interest and 
capitalized costs.
    Western's BCP electric service ratesetting formula was submitted to 
FERC for confirmation and approval on October 31, 1995. On April 19, 
1996, in Docket No. EF96-5091-000 at 75 FERC para. 62,050, FERC issued 
an order confirming, approving, and placing into effect on a final 
basis the electric service ratesetting formula for BCP. The ratesetting 
formula set forth in Rate Order No. WAPA-70 was approved for a period 
beginning November 1, 1995, and ending September 30, 2000.
    Western proposes to extend the existing ratesetting formula, and 
approve the proposed FY 2001 Base Charge of $47,788,574, and Rates of 
$0.99/kWmonth for capacity and 5.04 mills/kWh for energy, which ensures 
sufficient revenues to pay for the BCP project expenses, interest, and 
capital requirements through September 30, 2001. Increased annual 
expenses have contributed to the proposed annual rate adjustment.
    In accordance with 10 CFR part 903, Western held a consultation and 
comment period. The notice of the proposed ratesetting formula and for 
the proposed FY 2001 Base Charge and Rates of the electric service was 
published in the Federal Register on March 10, 2000.
    Following review of Western's proposal within the Department of 
Energy, I approved Rate Order No. WAPA-94, on an interim basis, for the 
Boulder Canyon Project electric service Rate Schedule BCP-F6 through 
September 30, 2005, and the FY 2001 Base Charge and Rates through 
September 30, 2001.

    Dated: September 18, 2000.
T.J. Glauthier,
Deputy Secretary.

Order Approving the Boulder Canyon Project Electric Service 
Ratesetting Formula and the FY 2001 Base Charge and Rates

    This ratesetting formula was established under section 302(a) of 
the Department of Energy Organization Act (42 U.S.C. 7152(a)), through 
which the power marketing functions of the Department of the Interior 
and the Bureau of Reclamation under the Reclamation Act of 1902 (ch. 
1093, 32 stat. 388), as amended and supplemented by subsequent 
enactments, particularly section 9(c) of the Reclamation Project Act of 
1939 (43 U.S.C. 485h(c)), were transferred to and vested in the 
Secretary of Energy (Secretary).
    By Amendment No. 3 to Delegation Order No. 0204-108, published 
November 10, 1993 (58 FR 59716), the Secretary delegated (1) The 
authority to develop long-term power and transmission rates on a 
nonexclusive basis to the Administrator of the Western Area Power 
Administration (Western); and (2) the authority to confirm, approve, 
and place into effect on a final basis, to remand, or to disapprove 
such rates to the Federal Energy Regulatory Commission (FERC).
    In Delegation Order No. 0204-172, effective November 24, 1999, the 
Secretary delegated the authority to confirm, approve, and place such 
rates into effect on an interim basis to the Deputy Secretary. Existing 
Department of Energy (DOE) procedures for public participation in 
electric service rate adjustments are located at 10 CFR part 903, 
effective September 18, 1985 (50 FR 37835). Procedures for approving 
Power Marketing Administration rates by FERC are found in 18 CFR part 
300.

Acronyms and Definitions

    As used in this rate order, the following acronyms and definitions 
apply:

BCP: Boulder Canyon Project.
Base Charge: The total charge paid by a Contractor for capacity and 
energy based on the annual revenue requirement, under section 13 of the 
BCPIA effective February 17, 1995. The base charge shall be composed of 
a capacity component and an energy component.
BCPIA: The Boulder Canyon Project Implementation Agreement which became 
effective February 17, 1995. The agreement resolved eleven rate-related 
issues: (1) Replacements; (2) Visitor Facilities; (3) Amendment to 
Regulations; (4) Multi-Project Benefits and Costs; (5) Engineering & 
Operating Committee (E&OC) and Coordinating Committee; (6) Billing and 
Payment; (7) Operating Amount and Working Capital; (8) Audits; (9) 
Principal Payments; (10) Annual Rate Adjustments; and (11) Uprating 
Credits.
Calculated Energy Rate: The calculated amount equal to 50 percent of 
the annual revenue requirement for each FY divided by the energy deemed 
delivered in such FY.
Capacity Dollar: The amount of revenue to be billed for BCP capacity 
sales for each FY. Such amount shall be 50 percent of the annual 
revenue requirement, adjusted for the annual capacity credit in 
accordance with section 13.9 of the BCPIA.
Contractors: An entity with a contract and receiving service from 
Western's Desert Southwest Customer Service Region. The BCP Contractors 
are: City of Anaheim, Arizona Power Authority, City of Azusa, City of 
Banning, City of Boulder City, City of Burbank, Colorado River 
Commission, City of Colton, City of Glendale, City of Los Angeles 
Department of Water & Power, Metropolitan Water District of Southern 
California, City of Pasadena, City of Riverside, Southern California 
Edison, and City of Vernon.
DOE: Department of Energy.
DOE Order RA 6120.2: An order identifying the financial reporting and 
rate-making procedures for the power marketing administrations.
Energy Dollar: The amount of revenue to be billed for BCP energy sales 
for each FY. Such amount shall be 50 percent of the annual revenue 
requirement, adjusted for the annual capacity credit in accordance with 
section 13.9 of the BCPIA.
FERC: Federal Energy Regulatory Commission.
FY: Fiscal Year, October 1 through September 30.
Forecast Capacity Rate: Equals the Capacity Dollar divided by 1,951,000 
kWs.
Forecast Energy Rate: Equals the Energy Dollar divided by the lesser of 
the energy forecasted in the total master schedule or 4,501.001 million 
kWhs.
Hoover Dam: The dam on the Colorado River which forms Lake Mead.
kW: Kilowatt.
kWh: Kilowatthour.
mills/kWh: Mills per kilowatthour.

[[Page 60934]]

NEPA: National Environmental Policy Act of 1969.
OM&R: Operation, maintenance, and replacement.
PRS: Power Repayment Study.
Project Act: The Boulder Canyon Project Act authorizing the 
construction of Boulder Canyon Project dated December 21, 1928 (43 
U.S.C. 617, et seq.).
Rates: A forecast energy rate and a forecast capacity rate.
Rate Year: The next FY for which the annual revenue requirement is 
forecast for annual rate determination purposes in the PRS.
Reclamation: United States Department of the Interior, Bureau of 
Reclamation.
Western: United States Department of Energy, Western Area Power 
Administration.

Effective Date

    This Rate Order No. WAPA-94 approves the existing ratesetting 
formula and the FY 2001 Base Charge and Rates which will take effect on 
October 1, 2000. The ratesetting formula will be in effect on an 
interim basis, pending FERC's approval of this or a substitute 
ratesetting formula on a final basis for a 5-year period ending 
September 30, 2005, or until superseded.

Public Notice and Comment

    Western held a consultation and comment period under 10 CFR part 
903. A Federal Register notice was published March 10, 2000, announcing 
Western's proposal to extend the existing ratesetting formula, and of 
the calculation of the FY 2001 Base Charge and Rates. The notice also 
announced a public information forum on April 13, 2000, and a public 
comment forum on May 9, 2000.
    On March 30, 2000, Western met with the Contractors and again 
notified them of Western's intent to extend the existing ratesetting 
formula and presented the proposed calculation of the FY 2001 Base 
Charge and Rates. Western discussed in detail the FY 2001 budget and 
capital expenditures. This Order is for approval of the existing 
ratesetting formula and the calculation of the FY 2001 Base Charge and 
Rates.

Project Description

    The BCP was authorized for construction by the Project Act. The 
Project Act provided for a dam to be built in the Black Canyon located 
on the Colorado River adjacent to the Arizona-Nevada border. The dam 
was built for the express purposes of: (1) Controlling the flooding in 
the lower regions of the Colorado River drainage system, (2) improving 
navigation of the Colorado River and its tributaries, (3) regulating 
the Colorado River, while providing storage and delivery of the stored 
water for the reclamation of public lands; and (4) generating 
electrical energy as a means of making the BCP a self-supporting and 
financially solvent undertaking.
    Construction of Hoover Dam, formerly known as Boulder Dam, began in 
1930. Commercial power generation began in 1936 with the first 
generating unit of the powerplant going into service in 1937. The 
Hoover Powerplant has 19 generating units and an installed capacity of 
2,074 MW.
    The Hoover Powerplant Act of 1984 sets forth the amounts of Hoover 
power to be sold beginning June 1, 1987, to the 15 Contractors located 
in the states of Arizona, California, and Nevada.

Power Repayment Studies

    The BCPIA Contract No. 95-PAO-10616 requires that the amount of 
each annual Base Charge and Rates be reviewed annually prior to October 
1 and adjusted upward or downward, and to take effect in the first 
billing period of the Rate Year. Each FY Western estimates BCP expenses 
by preparing a PRS that includes estimates for OM&R costs for the BCP 
to determine the annual revenue requirement for the next FY. The 
preparation of each FY's PRS includes adjustments from estimated to 
actual dollars in the previous year's PRS. Any adjustments required, 
whether resulting in an increase or decrease of the annual revenue 
requirement, are carried forward and included in the estimated revenue 
requirement used to calculate the next year's rate.
    Each annual Base Charge pays the annual amortized portion of the 
United States' investment in the BCP facilities with interest and 
associated OM&R costs. This repayment schedule does not depend upon the 
power and energy made available for sale or the rate of generation each 
year.

Certification of Rate

    Western's Administrator has certified that the BCP electric service 
ratesetting formula determining the annual Base Charge and Rates placed 
into effect on an interim basis is consistent with applicable laws, 
policies, regulations, agreements, and departmental orders and the 
calculation of the FY 2001 Base Charge and Rates is the lowest 
consistent with sound business principles.

Discussion

    According to Reclamation law, Western must establish power rates 
sufficient to recover operation, maintenance, and purchase power 
expenses, and to repay the Federal Government's investment in 
generation and transmission facilities. Rates must also be set to cover 
interest expenses on the unpaid balance of facilities' investments, and 
replacements and additions, and certain non-power costs in excess of 
the irrigation users' ability to pay.
    Western prepares an annual PRS that identifies the estimated annual 
revenue requirement for the next FY. In accordance with the contracts, 
expenses for replacements and additions are included in the annual 
anticipated OM&R. The existing ratesetting formula for the BCP requires 
that each year the Contractors pay the total estimated annual revenue 
requirement in return for up to 1,951,000 kWs of capacity and 4,501.001 
million kWhs of energy. The capacity and energy, produced up to the 
above limits at the BCP, are allocated to the Contractors on a 
percentage basis. The existing ratesetting formula for the annual Base 
Charge and Rates satisfies the cost-recovery criteria set forth in DOE 
Order RA 6120.2.

Statement of Revenue and Related Expenses

    The annual revenue requirement for the BCP is based upon the PRS 
calculations for future requirements, which will be adjusted when FY 
actuals are known. The following tables provide a summary of the 
revenues and expenses for the existing electric service ratesetting 
formula and also the projected revenues and expenses for the proposed 
5-year electric service ratesetting formula.

[[Page 60935]]



                                     BCP Revenues and Expenses, FY 1996-2000
                                                    [$1,000]
----------------------------------------------------------------------------------------------------------------
                              Item                                    Actual         Projected      Difference
----------------------------------------------------------------------------------------------------------------
Total Revenues..................................................        $276,372        $315,522
Sum of Prior Year's Revenue Adjustment..........................         (4,122)               0
                                                                 -----------------------------------------------
    Adjusted Total Revenues.....................................         272,250         315,522       ($43,272)
                                                                 -----------------------------------------------
Revenue Distribution:
    O&M.........................................................         116,148         131,051        (14,903)
    Payments to States..........................................           3,000           3,000               0
    Other.......................................................          20,604          23,201         (2,597)
    Uprating Payments...........................................          58,102          74,699        (16,597)
    Replacements................................................          17,612          20,402         (2,790)
    Working Capital.............................................         (1,347)             653         (2,000)
    Interest....................................................          62,032          62,577           (546)
    Investment replayment.......................................          14,185          13,577             930
    Prior Year Carryover........................................         (9,878)        (13,317)         (3,439)
    Sum of Prior Year's Expense Adjustment......................         (8,208)               0         (8,208)
                                                                 -----------------------------------------------
        Total Revenue Distribution..............................         272,250         315,522        (43,272)
----------------------------------------------------------------------------------------------------------------


              BCP 5-Year Projections, Revenues and Expenses
                                [$1,000]
------------------------------------------------------------------------
                                                               FY 2001-
                                                                 2005
                                                             projections
------------------------------------------------------------------------
Total Revenues.............................................     $317,809
------------------------------------------------------------------------
Revenue Distribution:
    O&M....................................................      141,448
    Payments to States.....................................        3,000
    Other Expense..........................................       42,490
    Uprating Payments......................................       55,751
    Replacements...........................................        9,456
    Working Capital........................................            0
    Interest...............................................       57,792
    Investment Repayment...................................        9,811
    Carryover..............................................      (1,939)
------------------------------------------------------------------------
        Total Revenue Distribution.........................      317,809
------------------------------------------------------------------------

Basis for Rate Development

    The annual Energy Dollar and Capacity Dollar are designed to 
maintain a 50/50 split between revenue earned from energy sales and the 
capacity credit revenue adjustment to resolve the historic imbalance 
between revenues collected from capacity and energy. The cost to an 
individual BCP Contractor varies because of the differences in each BCP 
Contractor's entitlement.
    Each Contractor is billed a monthly Base Charge comprised of: (1) 
An energy charge equal to the Rate Year Energy Dollar multiplied by the 
Contractor's firm energy percentage multiplied by its monthly energy 
ratio; and (2) a capacity charge equal to the Rate Year Capacity Dollar 
divided by 12 multiplied by the Contractor's contingent capacity 
percentage. The monthly Base Charge is due and payable regardless of 
the amount of power and energy produced by BCP. The annual Base Charge 
does not depend upon the amount of power and energy made available for 
sale.
    In addition to the Contractor's monthly Base Charge, a Forecast 
Energy Rate and a Forecast Capacity Rate are calculated and applied to: 
(1) Excess energy; (2) unauthorized overruns; and (3) water pump 
energy.
    At the end of the FY, and once the actual energy deemed delivered 
is known, Western determines a Calculated Energy Rate. If the actual 
energy deemed delivered is greater than 4,501.001 million kWhs, Western 
then applies the Calculated Energy Rate to each Contractor's energy 
deemed delivered to determine the Contractor's actual energy charge. 
Western then establishes a credit or debit for each Contractor based on 
the difference between the Contractor's Energy Dollar and the 
Contractor's actual energy charge. The credit or debit is then applied 
to the Contractor's next power bill.

Comments

    During the public consultation and comment period, Western received 
4 written comment letters on the annual rate adjustment. In addition, 5 
contractor representatives commented during the May 9, 2000, public 
comment forum. All comments received by the end of the public 
consultation and comment period on June 8, 2000, that were relevant to 
this rate process, were reviewed and considered in preparing this rate 
order.
    Written comments were received from:

Arizona Power Authority, AZ
Colorado River Commission, NV
Irrigation & Electrical Districts Association of Arizona, AZ
Metropolitan Water District of Southern California, CA

    Comments dealt with specific cost allocation methodologies, 
unbundling of the Visitor Center cost components, civil service 
retirement costs, providing timely information to the Contractors, and 
commitment to maintaining the schedule for the various processes 
implemented under the BCPIA. All comments supported Western's efforts 
to reduce the Base Charge and Rates. The following is a summary of all 
relevant comments received and Western's responses to those comments. 
Comments and responses are paraphrased for brevity. Specific comments 
are used for clarification where necessary.

Rate Impacting Issues

    Comment: A major component of the increase in revenue requirements 
at Hoover is associated with efforts to increase and ensure unit 
availability through capital investments. Can Western and Reclamation 
provide an estimate of the expected increase in unit availability?
    Response: This issue of unit availability was discussed at the 
Engineering and Operating Committee (E&OC) meeting held May 17, 2000, 
in Las Vegas, NV. As an agenda item for the upcoming E&OC meeting in 
October 2000, Contractors are to decide, as a group, how important 
plant availability is to them and subsequently provide that information 
to Western and Reclamation as input into the decision making process 
related to capital investments.
    Comment: A Contractor requested a response from Western regarding a

[[Page 60936]]

Contractor proposal whereby the costs for the Buchanan Boulevard 
Project be allocated in proportion to the voltage of each project's/
entity's transmission lines interconnected at Mead rather than 
allocating the total costs among Western's three projects.
    Response: Western believes the contractor proposal is incomplete or 
too vague at this time to determine whether it would be a more 
appropriate method than Western's current allocation method. Western's 
current allocation of the total costs for the Buchanan Boulevard 
Project is allocated between Western's three projects that are 
interconnected at Mead Substation. Based upon this logic, approximately 
one-third is allocated to BCP, one-third to the Parker-Davis Project, 
and one-third to the Pacific Northwest-Pacific Southwest Intertie 
Project.
    As stated during the informal stage of the rate process, Western is 
pursuing non-reimbursable emergency funding from the Federal Highway 
Administration. In the event that Western is not successful in 
obtaining this funding, Western will conduct a re-evaluation of the 
current allocation method, at which time Western would further consider 
the Contractor's proposal.
    Comment: A Contractor requested that costs related to the Visitor 
Center and Parking Structure be accounted for as Visitor Services 
expense rather than regular O&M expense. The Contractors also requested 
a meeting to discuss various Visitor Services issues.
    Response: A meeting was held on June 29, 2000, with Reclamation, 
Western, and the Contractors to discuss this issue. It was agreed by 
all that beginning in FY 2001, the expenses related to the Visitor 
Services would be accounted for as such, and not be included under 
regular O&M expense.
    Comment: A Contractor expressed concern that the costs due to the 
FERC open access orders and additional costs to power marketing 
services are inappropriately charged to the existing power Contractors. 
The Contractors are recommending that Western and the BCP Contractors 
revisit the cost allocation procedures and determine a more equitable 
determination of allocating the costs to the projects.
    Response: Western is currently seeking to schedule a meeting with 
the Contractors to discuss organizational responsibilities and how each 
organization within the Desert Southwest Region allocates their costs.
    Comment: The Contractors stated they believe Western has no 
authority to collect civil service retirement costs in their rates.
    Response: DOE General Counsel stated by memorandum dated July 1, 
1998, the Power Marketing Administrations (PMAs) have the authority to 
collect, through the rates, the full costs of the retirement benefits. 
In addition, FERC has issued numerous orders approving the inclusion of 
such costs in PMA rates: Western Area Power Administration (Intertie 
Project), 87 FERC para. 61,346 (1999), Southeastern Power 
Administration, 86 FERC para. 61,195 (1999), and Southeastern Power 
Administration, 91 FERC para. 61,272 (2000). Under the provisions of 
the Boulder Canyon Project Adjustment Act, 43 U.S.C. 618-618p, all 
receipts from the BCP shall be paid into the Colorado River Dam Fund 
(CRDF) and are available for defraying the costs of operation. The 
total dollars associated with these costs, collected into the CRDF, 
under these authorities, through FY 2001 is approximately $4.9 million.

General Issues

    Comment: A Contractor commented that Western and Reclamation need 
to work harder on cost control and containment in the future.
    Response: Western and Reclamation have worked very diligently with 
the BCP Contractors under the BCPIA, and will continue to work on cost 
control and containment in coordination with the Contractors. This 
collaborative process has held total expenses to less than an average 
annual increase of 2 percent since FY 1994.
    Comment: A Contractor noted the importance and need to pay 
attention to the change in discretionary components of the budget and 
not allow fixed components to ``muddy the water.''
    Response: Western and Reclamation are aware of the cost components 
in the annual budgets that are considered discretionary items versus 
fixed items. The various annual processes allow us to focus on the 
discretionary items. However, in the future, Western will present the 
discretionary items separately from the fixed items, and demonstrate 
the impacts of both, on the annual Base Charge and Rates.
    Comment: A Contractor emphasized its concern for rate increases, 
and that BCP power was three-fourths of their annual operating budget.
    Response: Western and Reclamation are committed to continue working 
with the BCP Contractors in keeping increases in the Base Charge and 
Rates the lowest possible consistent with sound business principles.
    Comment: A Contractor noted the need for more communications to 
extend beyond the various processes, among Western, Reclamation, and 
the Contractors to ensure common understanding of a Contractor's intent 
regarding questions, and the appropriate responses.
    Response: In addition to the E&OC, the ten year operating plan, and 
the technical review committee processes, Western and Reclamation are 
open to more communications with the Contractors. Both agencies are 
committed to enforcing the appropriate time tables and are open to more 
opportunities for better communications for understanding Contractor 
needs during, and outside of, each process at the Contractor's request.
    Comment: The Contractors stated the need for more timely processes. 
The Contractors also commented that they fully expect Western and 
Reclamation to resolve, within the very near future, the causes of the 
encumbrances by other activities, resulting in information not being 
made available to them due to lack of resources.
    Response: Western and Reclamation apologize for the delay, lack of 
information provided, and short turn around for Contractor comment in 
the current ten year operating plan process. Both agencies are 
committed to working diligently through future annual processes, and in 
a timely manner, as set forth and agreed to, under Section 12 and 
Appendix D of the BCPIA.

    Comment: A commentor stated that the E&OC process is ``flawed'' 
because of the continuing increase in revenue requirements for BCP, and 
that the E&OC has the wrong focus. Rather than justifying annual cost 
increases, they need to refocus on the approach to ``budgeting,'' and 
hold Western and Reclamation to the goal of a 2- to 3-percent increase 
from year to year.
    Response: Western and Reclamation do not agree that the E&OC 
process is flawed, given the accomplishments of the E&OC since February 
1995. Processes were implemented that created the existing rate 
methodology of an annual Base Charge for the purchase of Hoover power, 
which is derived from the annual revenue requirement and the 
contractual entitlement percentages, rather than paying an annual 
energy and capacity rate based on projected annual hydrology. The 
annual ten year operating plan process was developed under the E&OC and 
allows for Contractor input and review of the annual plan that impacts 
the annual Base Charge and Rates. Each FY, a final operating plan is 
published with Western, Reclamation, and the Contractors agreeing to 
the increases in annual expenses that go forth in the annual rate 
process. In addition to these

[[Page 60937]]

processes, Western and Reclamation are committed to continue working 
with the Contractors to mitigate the annual increases and are open to 
additional meetings with the Contractors. Once again, as an example of 
Western's and Reclamation's commitment to minimizing year to year cost 
increases, since 1994, BCP's total expenses have increased by less than 
an average of 2 percent per year through FY 2000.

    Comment: A Contractor requests that Western commit to implementing 
an accounting process that identifies direct costs associated with the 
generation and transmission functions.
    Response: Western is planning to implement direct charging work 
order numbers during the forthcoming FY.

Environmental Compliance

    In compliance with the National Environmental Policy Act (NEPA) of 
1969, 42 U.S.C. 4321, et seq.; Council on Environmental Quality 
Regulations (40 CFR parts 1500-1508); and DOE NEPA Regulations (10 CFR 
part 1021), Western has determined that this action is categorically 
excluded from the preparation of an environmental assessment or an 
environmental impact statement.

Determination Under Executive Order 12866

    Western has an exemption from centralized regulatory review under 
Executive Order 12866; accordingly, no clearance of this notice by the 
Office of Management and Budget is required.

Regulatory Flexibility Analysis

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601, et seq.) 
requires Federal agencies to perform a regulatory flexibility analysis 
if a final rule is likely to have a significant economic impact on a 
substantial number of small entities and there is a legal requirement 
to issue a general notice of proposed rulemaking. Western has 
determined that this action does not require a regulatory flexibility 
analysis since it is a rulemaking of particular applicability involving 
rates or services applicable to public property.

Small Business Regulatory Enforcement Fairness Act

    Western has determined that this rule is exempt from congressional 
notification requirements under 5 U.S.C. 801 because the action is a 
rulemaking of particular applicability relating to rates or services 
and involves matters of procedure.

Availability of Information

    Information regarding this ratesetting formula and the calculation 
of the FY 2001 Base Charge and Rates, including PRSs, letters, 
memorandums, and other supporting material made or kept by Western used 
to develop the provisional ratesetting formula, is available for public 
review in the Desert Southwest Customer Service Regional Office, 
Western Area Power Administration, 615 South 43rd Avenue, Phoenix, AZ 
85009-5313; and in the Power Marketing Liaison Office, Room 8G-027, 
1000 Independence Avenue SW., Washington, DC 20585-0001.

Submission to Federal Energy Regulatory Commission

    The ratesetting formula and the calculation of the FY 2001 Base 
Charge and Rates herein confirmed, approved, and placed into effect on 
an interim basis, together with supporting documents, will be submitted 
to FERC for confirmation and approval.

Order

    In view of the foregoing and under the authority delegated to me by 
the Secretary, I hereby approve on an interim basis, effective October 
1, 2000, Rate Schedule BCP-F6 for electric service, and the FY 2001 
Base Charge and Rates for the Boulder Canyon Project. Rate Schedule 
BCP-F6 will be in effect on an interim basis, pending FERC confirmation 
and approval or a substitute ratesetting formula on a final basis 
through September 30, 2005.

    Dated: September 18, 2000.
T.J. Glauthier,
Deputy Secretary.

Boulder Canyon Project; Schedule of Rates for Electric Service

[Rate Schedule BCP-F6; (Supercedes BCP-F5)]

Effective: The first day of the first full billing period beginning on 
or after October 1, 2000, and remaining in effect through September 30, 
2005, or until superseded.
Available: In the marketing area serviced by the Boulder Canyon Project 
(BCP).
Applicable: To power contractors served by the BCP supplied through one 
meter, at one point of delivery, unless otherwise provided by contract.
Character and Conditions of Service: Alternating current at 60 hertz, 
three-phase, delivered and metered at the voltages and points 
established by contract.
Base Charge: The total charge paid by a contractor for annual capacity 
and energy based on the annual revenue requirement. The Base Charge 
shall be composed of an energy component and a capacity component:
    Energy Charge: Each Contractor shall be billed monthly an energy 
charge equal to the Rate Year Energy Dollar multiplied by the 
Contractor's firm energy percentage multiplied by the Contractor's 
monthly energy ratio as provided by contract.
    Capacity Charge: Each Contractor shall be billed monthly a capacity 
charge equal to the Rate Year Capacity Dollar divided by 12 multiplied 
by the Contractor's contingent capacity percentage as provided by 
contract.
Forecast Rates:
    Energy: Shall be equal to the Rate Year Energy Dollar divided by 
the lesser of the total master schedule energy or 4,501.001 million 
kWhs. This rate is to be applied for use of excess energy, unauthorized 
overruns, and water pump energy.
    Capacity: Shall be equal to the Rate Year Capacity Dollar divided 
by 1,951,000 kWs, to be applied for use of unauthorized overruns.
    Calculated Energy Rate: Within 90 days after the end of each rate 
year, a Calculated Energy Rate shall be calculated. If the energy 
deemed delivered is greater than 4,501.001 million kWhs, then the 
Calculated Energy Rate shall be applied to each Contractor's energy 
deemed delivered. A credit or debit shall be established based on the 
difference between the Contractor's Energy Dollar and the Contractor's 
actual energy charge, to be applied the following month calculated or 
as soon as possible thereafter.
Lower Basin Development Fund Contribution Charge: The contribution 
charge is 4.5 mills/kWh for each kWh measured or scheduled to an 
Arizona purchaser and 2.5 mills/kWh for each kWh measured or scheduled 
to a California or Nevada purchaser, except for purchased power.
Billing for Unauthorized Overruns: For each billing period in which 
there is a contract violation involving an unauthorized overrun of the 
contractual power obligations, such overrun shall be billed at 10 times 
the Forecast Energy Rate and Forecast Capacity Rate. The contribution 
charge shall be applied also to each kWh of overrun.
Adjustments: None.

[FR Doc. 00-26331 Filed 10-12-00; 8:45 am]
BILLING CODE 6450-01-P